Company Town

Changing Channels

Quirky Programming Whiz Puts Spin on USA Networks

When Stephen Chao was in charge of developing shows for the Fox television stations in the early '90s, he once so enraged his boss Barry Diller that Diller hurled a videocassette tape across the room, leaving a huge gash in the wall.

The two executives didn't speak for months, but Chao survived the blowup--and was even promoted months later. He even convinced Diller to sign the wall after Chao hung a frame around the scar, turning it into a work of art that hangs in Chao's garage today, years after he was unceremoniously fired from Fox in 1992 for hiring a stripper to perform at a company management retreat.

Outrageous and defiant acts are among the earmarks of the 42-year-old Harvard MBA, who revels in shaking up the establishment and who fancies himself too cool to conform to industry conventions, much less act like a corporate "suit."

Outspoken and opinionated, Chao is among the few Hollywood executives brazen enough to go toe-to-toe with the abrasive Diller. And his programming talents--he rewired prime-time economics with innovative shows such as the fugitive docudrama, "America's Most Wanted"--are valued by Diller.

So it came as little surprise--and was greeted mainly with approval--last month when Diller named him president of programming and marketing for USA Networks.

Chao and Stephen Brenner, a capable 16-year veteran of the company who was named president of operations, step into the void left by USA Networks founder Kay Koplovitz, who Diller swept aside after his purchase of the network and its sister Sci-Fi Channel from Universal Studios Inc. in February.

During the last six years, Stephen Chao Inc. has turned out a few network specials, including one for ABC that staged silly car accidents. The company consulted for Diller in his previous incarnation as head of QVC, creating a spinoff channel that went up in smoke with Diller's departure.

"He wasn't as successful on his own as you'd think," said former Fox boss Greg Nathanson, president of television for Emmis Broadcasting Corp. "He's brilliant. He sees things differently than most and has a very analytical mind. But he is not a salesman type and probably works better when other people do the selling.

Chao, who started his job last week, says the rap against USA Network--for a hodgepodge of programming that critics say blurs its identity--is unfair. "Based on its ratings, it couldn't be doing so badly," Chao said.

He has a particular soft spot for the popular World Wrestling Federation, which keeps USA consistently among the nation's top-rated cable channels. "My grandmother was this Chinese lady who came to America late in life with a heavy accent--a straight and proper woman who responded to nothing in American culture except the WWF and Bobo Brazil [the wrestler who died this year at age 74]. She liked the theater of it."

Chao's programming is informed by a life without boundaries. Part court jester, part prankster, he has a childlike fascination with breaking rules and for the morbid, lurid, raunchy and silly sides of life, which he seeks to experience first-hand. In his wake is a collection of bizarre vignettes: his trashing of rental cars left along the roadside when he was a reporter at the National Enquirer and adolescent behavior like faking sleep in Hollywood pitch meetings.

The descendant of a wealthy pre-revolutionary Chinese family, friends say Chao chose to live in a poor area of New York after graduating from Harvard with a degree in the classics. After being fired from Fox, he worked briefly at a McDonald's in Redondo Beach. He drives a beat-up maroon Volvo and lives in Venice with his wife, Irina, and their two boys, ages 4 and 7. He bought a building for his production company in an offbeat artists' strip of converted warehouses in Santa Monica formerly occupied by defense contractors.

"It's nice to be curious, fascinated and easily amused," Chao said. "My grandfather [a former Chinese economic minister to the U.S.] was endlessly involved in what he called social investigation and spent a lot of time trying to find out whether there was cannibalism in China. I consider myself a social investigator with a National Enquirer curiosity, although I hope I use some editing filters in my work."

Bright, antagonistic and "dangerously manipulative," according to one Hollywood insider, Chao made a name for himself with raw, provocative, tabloid-like shows such as "Cops," "America's Most Wanted" and the dating game "Studs." Critics call him sensationalistic and say he plays to the lowest common denominator. They doubt he'll do much to clean up USA's reputation for exploitative fare.

"I'm not into gratuitous and sleazy stuff," countered Chao. "It always comes from a point of view you've never seen."

Chao has a loyal core of fans who consider him an innovator and are impressed by the mountains of money he made for Fox.

"Stephen Chao is one of the most interesting people I know," Diller said. "He has an instinctive, contrarian program sensibility."